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Agency Interpretations
Abstract
What does it mean to say that an administrative agency is a source of law? Agencies constantly generate what our society regards as law, making and remaking legal obligations at a frenetic pace. Yet most of the rules agencies make lack the force of law and recognizing those that have this force is often an exceptionally complicated task. It is a task, in fact, that courts are often not suited to performing, at least not very well. In this article, I argue that the nature of contemporary legislative language and our turn toward increasingly informal agency processes have combined to render the bulk of lawmaking in our society unrecognizable within our conventional pictures of legality. If legal rules are, as most positivists maintain, simply “exclusionary reasons” by which legal actors guide their conduct, agency rules that are never enacted as “law” are becoming more and more of our law’s content. Informal processes like notice and comment were neither the beginning nor the culmination of our legal system’s departure from traditional, standardized forms of law. But they may be the best evidence of a highly plastic concept of law that is ascendant today.
Spurred by the disconnect between what was being taught in the classroom and actual practice, Godwin, Ainsworth, and Godwin set out to answer the question, Was political science missing some key aspects of the interactions between lobbyists and policy makers? Built on interviews with over 100 lobbyists, these authors show that much of the research on organized interests overlooks the lobbying of regulatory agencies even though it accounts for almost half of all lobbying even though bureaucratic agencies have considerable leeway in the how they choose to implement law. This groundbreaking new book argues that lobbying activity is not mainly a struggle among competing interests over highly collective goods; rather, it's the public provision of private goods. And more to the point, this shift in understanding influences our perception of the strengths and weaknesses of American democracy. Through a series of highly readable case studies, the authors employ both neo pluralist and exchange perspectives to explore the lobbying activity that occurs in the later stages of the policymaking process which are typically less partisan, involve little conflict, and receive scant public attention. Lobbying and Policymaking sheds new light on lobbying influence on the policy process, and is an ideal way to expose students to cutting-edge research in an accessible, fascinating package. © 2013 by CQ Press, an Imprint of SAGE Publications, Inc. CQ Press is a registered trademark of Congressional Quarterly Inc.
The Social Security Administration's Disability Insurance program encompasses a mammoth adjudicatory and appellate process, rivaling in size the entire federal judiciary. The SSDI is principally governed by validly promulgated regulations, but the SSA also uses an internal manual-"HALLEX"-to provide more detailed rules and guidance to its adjudicators and staff. The circuits have split over whether HALLEX is enforceable-whether it can bind the SSA such that violations of its provisions can be grounds for district court reversal. The Ninth and Third Circuits hold HALLEX to be per se unenforceable, with the Ninth categorically refusing to examine alleged violations. The Fifth Circuit, by contrast, will review alleged violations of HALLEX for prejudice and will remand to the SSA if prejudice is present. The circuit split results from unclear, decades-old Supreme Court precedent on what kinds of rules under what circumstances courts can enforce to bind agencies. This Note aims to reframe the "enforceability" debate by examining more recent doctrine on internal agency guidance and by outlining how it might interact with the "Accardi principle" underlying that earlier precedent. Specifically, it suggests that typically one-way, agency-invoked doctrines like Auer and Skidmore should be understood more broadly with respect to HALLEX and similar internal guidance, where the public is often the beneficiary of gratuitous protections. This approach provides the Fifth Circuit's approach with more certain doctrinal footing; it also preserves the Fifth Circuit's prejudice test, derived from the Accardi principle, as an essential guiding inquiry. Ultimately, it would promote effective administration and fair agency adjudication.
In this chapter, I parse our established NEPA categories, some of the many precedents construing CEQ's rules, some of the hard choices administrators face in NEPA compliance, and the practical differences therein, all in an effort to suggest some modest reforms that could make NEPA more of an aid and less of an obstacle to the ecosystemic management of natural systems. Part I introduces the NEPA action types and the precedents construing their boundaries. Part II sketches the major issues that permeate NEPA practice today, regardless of the action-type which the agency has chosen (or is ordered) to take. Part III proposes a more causation- and less compliance-oriented interpretation of NEPA, an interpretation of NEPA itself as a system with multiple interacting layers and processes that can be managed, but only by the shrewdest and ablest of managers.
This article finds that the financial regulatory agencies operate in an environment where regulatory actions often face legal challenge, but deregulatory actions are rarely challenged, and argues that the growing use of interpretive rules combined with administrative law doctrines that restrict access to legal review create an environment that is structurally biased to favor deregulation.Two examples of deregulatory agency action are explored in detail. The implementation of the 2004 Final Rule governing the provision of eligible liquidity facilities to asset-backed commercial paper conduits is evaluated and found to almost certainly fail a “clearly erroneous” standard of judicial review. The second example reviews Omarova’s study of the process by which the “business of banking” was reinterpreted to include trade in derivatives; the method of legal analysis that supported this reinterpretation was rejected by the D.C. Circuit. Both of these actions were implemented using interpretive rules, and in both cases these deregulatory actions have not faced legal challenge.This article argues that the combination of the growing use of interpretive rules and the application of doctrines determining who has standing to challenge the actions of the financial regulatory agencies in court forces agencies to favor deregulatory action over regulatory action. The article proposes (i) that every financial regulatory statute be amended to include a “citizen suit” clause and that courts uphold the right of citizens to sue under such clauses, and (ii) that a division of the Consumer Financial Protection Bureau be created that is dedicated to opposing the policy proposals made by regulated parties to financial regulatory agencies.
Agencies’ interpretations of ambiguous statutes under Chevron are not subject to a rule of stare decisis. Agencies may interpret and later reinterpret ambiguous statutes without settling the statute’s meaning. This article shows that this regime permits agencies to “interpret” law in legally unprincipled and inconsistent ways and prevents administrative statutes from meaningfully constraining agency policymaking. This article concludes that a rule of stare decisis should govern agencies’ interpretations of ambiguous statutes just as it governs judicial holdings. Taking seriously Chevron’s recognition of agencies’ power to interpret law, the conventional justifications for stare decisis – separation of powers, legislative supremacy, and the consistency of regulatory schemes – apply with equal force to agencies as to courts.
Every nation has an interest in sharing the gains they help create by participating in globalization. If governments fail to claim an adequate share of these gains, they will be forced to look ever more intensely to personal taxes on their own already-burdened citizens. Yet because of the structure of law and the mechanisms of legal decision-making in this area, it is all but impossible to observe how, and how much, governments are in fact claiming. This article shows that to date, excessive protection of taxpayer confidentiality has led to obscurity and minimization of hard law and a network of abstraction through soft law as its faulty and inadequate replacement. It argues that this paradigm serves the political goals of special interest groups at a high social cost. It concludes that at a time when national economic and political fortunes are experiencing high stress, uncertainty and volatility, we need much better information about how international tax law develops and works in practice.
This Article offers a comprehensive examination of the Skidmore standard for judicial review of agency legal interpretations as applied by the courts in the period since the Supreme Court revitalized Skidmore in United States v. Mead Corp. First, the Article documents an empirical study of five years worth of Skidmore applications in the federal courts of appeals. In the study, we evaluate two competing conceptions of Skidmore review - the independent judgment model and the theoretically more deferential sliding-scale model - and conclude that the appellate courts overwhelmingly follow the sliding scale approach. Also, contrary to two other, significantly more limited studies, we document that Skidmore review is highly deferential to agency interpretations of law, with agency interpretations prevailing in more than 60% of Skidmore applications. Drawing from the Skidmore applications studied, we then analyze more qualitatively how the appellate courts apply the Skidmore review standard as a sliding scale and identify where those courts are struggling to make sense of Skidmore's dictates within that model. To resolve the lower courts' difficulties, we propose re-conceptualizing Skidmore's sliding scale as balancing comparative agency expertise against the potential for agency arbitrariness. Finally, we note several burgeoning issues concerning the scope of Skidmore's applicability and offer preliminary thoughts for addressing those questions.
This paper stems from a project on European Union Administrative Law undertaken by the American Bar Association's Section on Administrative Law and Regulatory Practice. It explores the generation of normative texts by the Commission of the European Union, its executive body, from the perspective of Americans familiar with notice and comment rulemaking. Legislative drafting (an exclusive responsibility of the Commission), subordinate measures corresponding to American rules and regulations, and soft law generated by the Commission are all considered. In creating legislative proposals, the Commission uses techniques quite like American rulemaking, but with consultative practices (including electronic consultations) that seem more conducive to dialogue, and less open to simple grass-roots lobbying efforts. Soft law processes are also often highly consultative. But subsidiary legislation (rules and regulations, in American parlance) are generated following procedures considerably less transparent and open to public input, such as comitology, than one finds here.
For approximately two decades, courts have followed Chevron's two-step test for reviewing agency interpretations of statutes that they are charged with administering. Tensions have arisen where Chevron deference conflicted with principles of stare decisis, resulting from prior judicial constructions of statutes developed absent Chevron-eligible agency interpretations. In 2005's Brand X decision, the Supreme Court held that courts should only adhere to judicial precedents that foreclose the agency's present construction. In dissent, Justice Scalia argued that this turned Marbury on its head by permitting executive agencies to "overrule" the judiciary where the precedent had only supplied a "best" meaning. This Note refutes Justice Scalia's proposition by arguing that courts fulfill their duty to "say what the law is" by policing the boundaries of agency action. An agency does not "overrule" the judiciary because it can never change what the court states that the statute permits. It also argues that when agencies act - e.g., through adjudication or rulemaking - they are properly "changing" the law, pursuant to congressional delegation and within judicially regulated constraints. Since Congress could amend a statute without creating a Marbury problem, agency action adopting a conflicting interpretation also does not create a Marbury problem because it is effectively substituting for Congress.
The law governing judicial deference to agency statutory constructions is a complex brew of improbable fictions and proceduralism. One reason this state of affairs persists is that courts have failed to resolve a contradiction between two competing, sensible impulses in deference doctrine. Oceans of precedent over the last 150 years have stressed that courts should defer to longstanding, reasonable constructions by agencies of statutes they administer. Then along came Chevron, which extolled agency flexibility and instructed courts to extend strong deference even to interpretive flip-flops. Competition between the virtues of interpretive consistency and flexibility has bubbled through and confused judicial deference analysis ever since. The Supreme Court's recent efforts to limit the scope of Chevron's strong deference to agency constructions that carry the force of law has worsened such confusion, in part because the Court's discussion and application of this concept were incoherent. This Article proposes a commitment approach to this force-of-law limitation that has deep roots in the concept of the rule of law and considerable power to clarify deference doctrine by resolving the clash between the competing values of interpretive consistency and flexibility. For the rule of law to be genuine, the default position must be that laws have general applicability - i.e., the law for X should be the law for Y as well. This truism suggests that an agency's statutory construction properly can enjoy the force of law only where the agency has committed to applying its construction consistently across time and parties. Where an agency's construction is longstanding, the agency's commitment to consistent application is self-evident. The puzzle, of course, is to reconcile this commitment approach with Chevron's praise of interpretive flexibility. One solution is to recognize that an agency can genuinely commit to a new interpretation by adopting it in a manner that makes it costly to change course later. Where agencies commit to consistency in this way, there is less need for courts to engage in independent statutory construction to protect rule-of-law values, which should leave courts freer to accept the premise of strong deference that the best way to determine the meaning of an agency's statute is to trust the agency's own (rational) construction.
How easily should courts infer that federal statutes preempt state law? An ongoing debate exists on the question in Congress and among scholars and judges. One side calls for judges to protect federalism by adopting a rule of statutory construction that would bar preemption absent a clear statement of preemptive intent. Opponents argue against such a "clear statement" rule by arguing that state control over preemptable topics is often presumptively inefficient, because common-law juries lack expertise and because states are prone to imposing external costs on their neighbors. This article sidesteps these debates over preemption and instead argues that, quite apart from whether state law is itself efficient, an anti-preemption rule of statutory construction has benefits for the national law-making process. Because of the size and heterogeneity of the population that it governs, Congress has institutional tendencies to avoid politically sensitive issues, deferring them to bureaucratic resolution, and instead concentrating on constituency service. Non-federal politicians can disrupt this tendency to ignore or suppress political controversy, by enacting state laws that regulate business interests, thus provoking those interests to seek federal legislation that will preempt the state legislation. In effect, state politicians place issues on Congress' agenda by enacting state legislation. Because business groups tend to have more consistent incentives to seek preemption than anti-preemption interests have to oppose preemption, controversial regulatory issues are more likely to end up on Congress' agenda if business groups bear the burden of seeking preemption. Moreover, the interests opposing preemption tend to use publicity rather than internal congressional procedures to promote their ends. Therefore, by adopting an anti-preemption rule of construction, the courts would tend to promote a more highly visible, vigorous style of public debate in Congress.
In the Court's two wetlands cases last Term, a question of statutory interpretation divided the justices sharply, in part because so much rides on the particular statutory provision at issue. The provision, a cryptic definition within the Clean Water Act (CWA), has now provided three separate occasions at the Court where the justices have confronted (1) the Chevron doctrine and its associated collection of precedents, and (2) the CWA's daunting goal of restoring the chemical, physical, and biological integrity of the Nation's waters. In this essay, I argue that the way the Court went about resolving its differences is, unfortunately, instructive not just to environmental lawyers. It is illustrative of the Court's failed minimalism, disregard for its own precedents, and tired uses of semantics where truly substantive problems are confronting our society.
In United States v. Mead Corp., the Supreme Court held that an agency is entitled to Chevron deference for interpretations of ambiguous statutory provisions only if Congress delegates, and the agency exercises, authority to issue such interpretations with "the force of law." The Court did not define "force of law," and thus did not determine what type of agency procedures fit within Mead. Four years have passed since the Court decided Mead, and despite numerous Court of Appeals decisions, we still do not know when an agency is entitled to Chevron deference for interpretations issued through procedures less formal than notice-and-comment rulemaking or formal adjudication. Lower courts agree that, after Mead, agencies must issue interpretations in formats that reflect some indicia of lawmaking authority. But they lose focus thereafter. First, lower courts employ different analytical frameworks to determine the relevant indicia of lawmaking authority, making Chevron deference turn more on the decisional preference of a particular court than on the procedural choice of a particular agency. Second, lower courts cite uncertainty about Mead as reason to avoid extending Chevron deference exclusively or at all, taking easier routes that may restrict agency interpretive flexibility. Finally, lower courts read Mead to address a question more general than intended - namely, whether agencies possess delegated authority to issue interpretations governing the scope of their own authority, even through notice-and-comment rulemaking. In the process, they ignore what little guidance Mead provides on the significance of notice-and-comment rulemaking for Chevron eligibility. If justified in so doing, they nonetheless turn the decision somewhat on its head, reading it as relevant to determining when an explicit delegation of interpretive authority is necessary rather than when an implicit one is present. The consequences of Mead have not been good, as Justice Scalia predicted in his dissent. After surveying the chaos in the lower courts, this Article calls for clarification of Chevron analysis by accommodating procedural innovation within defined bounds. Thus, it neither advocates Justice Scalia's solution of abandoning the focus on procedural formality nor endorses the Court's current position, which recognizes the significance of procedural formality but permits Congress or agencies unbounded room to create procedures that are more efficient than the relatively formal ones we have come to accept for administrative lawmaking. While the Article could defend a formalistic approach that restricts Mead to notice-and-comment rulemaking or formal adjudication, it ultimately argues for more nuanced approach that allows Congress to design and agencies to invoke informal procedures without sacrificing Chevron eligibility so long as those procedures generate interpretations that are transparent, rational, and binding. It further contends that this approach is consistent with the best reading of Mead and its erstwhile partner, Barnhart v. Walton.
Administrative agencies increasingly enlist the judgment of private firms they regulate to achieve public ends. Regulation concerning the identification and reduction of risk - from financial, data and homeland security risk to the risk of conflicts of interest - increasingly mandates broad policy outcomes and accords regulated parties wide discretion in deciding how to interpret and achieve them. Yet the dominant paradigm of administrative enforcement, monitoring and threats of punishment, is ill suited to oversee the sound exercise of judgment and discretion. This Article argues that this kind of regulation should be viewed, instead, as regulatory "delegation" of the type Congress makes to agencies when it accords them the authority to fill in the details of ambiguous statutory mandates. Administrative law's "delegation" paradigm, unlike its "regulation" counterpart, relies on decision processes to channel discretion in the service of public goals. Informed by the comparative capacities of different institutions, it structures delegated decisionmaking to promote rational and accountable policy implementation. The Article then applies this administrative law approach to the exercise of delegated discretion by regulated firms. Drawing from the literature on judgment and decisionmaking in organizations used increasingly by corporate law scholars, it suggests that the efficient structure of profit-making firms will, in a subset of cases, systemically blind decisionmakers to the types of risk and change in which regulation is interested, and lead to unaccountable regulatory decisions. Finally, I suggest ways in which administrative law might learn from recent research on organizational learning that examines how decisionmaking in firms can be structured more effectively, to incorporate additional accountability tools through regulatory design, third-party relationships, and relations between administrative agencies and those they regulate.
In its recent decision in National Cable & Telecommunications Association v. Brand X Internet Services, the Supreme Court held that a court's independent construction of ambiguity in an agency-administered statute is not authoritative - even when rendered in the absence of binding agency views. Rather, judicial constructions of ambiguous statutory terms can be overridden by Chevron-eligible agencies. Although Brand X appears to resolve a longstanding battle between Chevron and stare decisis by transferring significant interpretive authority from courts to agencies, the Court's decision raises many new questions. This Article focuses on one prominent question raised by Brand X: now that federal courts know that their independent constructions of regulatory statutes may amount to nothing more than an interim construction that can be cast aside by the relevant agency, should courts avoid issuing their own independent judicial interpretations in the first place? In answering this question, this Article draws on the federal courts' experience in the federalism context in the wake of the Court's landmark decision in Erie Railroad Company v. Tompkins. After the Court handed down Erie, various mechanisms, including abstention and state certification, emerged to enable the federal courts to communicate with the state courts rather than blindly issuing their own provisional readings of ambiguous state law. The federal courts' willingness to adapt to their reduced lawmaking role in the federalism context by moving toward a more interactive model suggests that the courts similarly could adapt to their newly reduced interpretive role in the administrative realm post-Brand X. Specifically, this Article argues that an interactive approach - whereby federal courts consider soliciting agency views using either the primary jurisdiction doctrine or requests for agency amicus curiae briefs - would enable the courts to minimize those situations where a court will independently construe a statute one way in the absence of agency views only to have the relevant agency turn around and impose a contrary interpretation. Use of an interactive approach in the administrative context promises to further efficiency and uniformity, to minimize the frequency of confrontational games between agencies and courts, and to enable courts to capitalize on agency expertise.
The American rulemaking spectrum ranges from one Constitution, through hundreds of congressional statutes, thousands of administrative regulations, and tens of thousands of important guidance documents to innumerable more casual agency documents such as press releases or letters of advice. Our legal system treats constitutions, statutes and regulations, if valid, as binding text, subject only to the requirements that they be authorized by the superior authority and appropriately adopted following designated procedures; if valid, each of them has legislative effect on government and citizen alike, until displaced by another text validly adopted at the same or a higher level. The innumerable casual items at the base of this pyramid, while often in fact influential on private conduct, are denied any formal jural effect. It is at the level of important guidance documents that one finds confusion: confusion whether they are legitimate instruments of agency policy or a ruse to evade the higher procedural obligations associated with adopting regulations; confusion whether an agency may give them any jural effect and, if so, to what degree; and confusion whether and to what extent they must be respected by the courts. Since the frequency with which these documents are prepared suggests their importance, this confusion is regrettable. Generally ignored provisions of the American Administrative Procedure Act, 5 U.S.C. 552(a)(1,2), appear to recognize that these documents may be treated as if they were precedents (not legislative documents) if they have been appropriately published. Hence, they may be described as "publication rules," to distinguish them from the more formal regulations that are adopted following notice and comment procedures and that enjoy, if valid, legislative effect. The paper builds on these provisions to critique recent judicial decisions and to suggest a general approach to publication rules following the model of precedent.
In the last quarter-century, the Supreme Court has legitimated agency authority to interpret regulatory legislation, above all in Chevron U.S.A., Inc v Natural Resources Defense Council, Inc, the most-cited case in modern public law. Chevron recognizes that the resolution of statutory ambiguities often requires judgments of policy; its call for judicial deference to reasonable interpretations was widely expected to have eliminated the role of policy judgments in judicial review of agency interpretations of law. But this expectation has not been realized. On the Supreme Court, conservative justices vote to validate agency decisions less often than liberal justices. Moreover, the most conservative members of the Supreme Court show significantly increased validation of agency interpretations after President Bush succeeded President Clinton, and the least conservative members of the Court show significantly decreased validation rates in the same period. In a similar vein, the most conservative members of the Court are less likely to validate liberal agency interpretations than conservative ones and the least conservative members of the Court show the opposite pattern.Similar patterns can be found on federal appellate courts. In lower court decisions involving the EPA and the NLRB from 1990 to 2004, Republican appointees demonstrated a greater willingness to invalidate liberal agency decisions and those of Democratic administrations. These differences are greatly amplified when Republican appointees sit with two Republican appointees and when Democratic appointees sit with two Democratic appointees.
It is commonly argued that one virtue of common-law rule-making (or law-making) is that the common law judge is enriched in being able to make legal rules while simultaneously seeing one concrete application of such a rule. Under the traditional view, the live dispute before the law-making court gives that court an appreciation of the real people, real facts, and real controversies with which the rule must deal. But legal rules, unlike adjudications, are general, and thus encompass multiple individuals and multiple facts. The task of the common law rule-maker, is therefore to assess the larger field that the putative rule will cover, and the larger array of events that the rule will control. Doing this in the context of a concrete controversy, however, is likely to give the rule-maker a distorted rather than accurate picture of what the larger array looks like. The phenomena of availability, anchoring, and issue framing, each well-documented in modern behavioral economics, social psychology, and political science, will all serve to focus the court’s attention on the immediate case, and at the same time lead the court to believe that the immediate case and its salient features are more representative of the larger array than is in fact the case. The very availability of the concrete dispute, exacerbated by the obligation of having to decide it, may thus be far more distorting than illuminating to a law-making court, and may consequently call into question the traditional respect not only for the value of concrete disputes and concrete parties as providing the best platform for prospective law-making, but perhaps also for the common law method in general.